lfdLongford Energy Inc. has signed a letter of intent with Stetson Oil and Gas Ltd. whereby Stetson will acquire Canadian oil and gas properties from Longford for a purchase price of $425,000 effective Sept. 1, 2009. The properties are situated in the Lashburn area of Saskatchewan and the Brazeau and Alder Flats areas of Alberta. Total combined net production from these properties is approximately 45 barrels of oil equivalent per day. Closing of the transaction is expected to occur on or before Sept. 30, 2009, subject to TSX Venture Exchange approval.
Longford's oil and gas reserves were evaluated by GLJ Petroleum Consultants Ltd. effective July 31, 2009. The GLJ evaluation estimated total proven and probable reserves of 96,000 barrels of oil equivalent, with a net present value, before tax and discounted at 10 per cent, of $1,281,000. As part of the transaction, Stetson will assume abandonment liabilities on two wells and an oil battery located at Alder Flats.
The transaction will be considered a non-arm's-length transaction for the purposes of the TSX-V because Stetson and Longford have two common directors, being Stan Bharti and Ahmed Said, and two common officers, being Gary Lobb and Patrick Gleeson.
The transaction is part of Longford's strategic plan to focus on its significant interest recently acquired in the Chia Surkh block production sharing contract in the Kurdistan region, Iraq.